EX-99.1 2 c03703exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
FOR FURTHER INFORMATION CONTACT:
Bruce A. Klein
Vice President-Finance and Chief Financial Officer
Franklin, Tennessee
615-771-3100
FOR IMMEDIATE RELEASE
WEDNESDAY, MARCH 22, 2006
CLARCOR REPORTS RECORD FIRST QUARTER 2006 RESULTS
NET SALES UP 9%, OPERATING PROFIT UP 23%
NET EARNINGS UP 23%, DILUTED EPS UP 24%
Unaudited Fiscal First Quarter 2006 Highlights
(Amounts in thousands, except per share data and percentages)
                         
    Quarter Ended     %  
    3/4/06     2/26/05     Change  
     
Net Sales
   $ 213,183     $ 196,261       8.6  
Operating Profit
   $ 25,873     $ 21,080       22.7  
Net Earnings
   $ 16,201     $ 13,154       23.2  
Diluted Earnings Per Share
   $ 0.31     $ 0.25       24.0  
Average Diluted Shares Outstanding
     52,498,939       52,321,798       0.3  
First Quarter 2006 Operating Review
     FRANKLIN, TN, Wednesday, March 22, 2006—CLARCOR Inc. (NYSE: CLC) today reported results for the first quarter ended March 4, 2006. Sales in the first quarter of 2006 rose by $17 million, a 9% increase compared to 2005. Both operating profit and net earnings increased by 23% compared to the same quarter in 2005. Diluted earnings per share increased by 24%. Foreign currency fluctuations did not materially impact sales or net earnings for the quarter. Acquisitions completed after the first quarter of 2005 added $3.1 million to first quarter 2006 sales and $700 thousand to first quarter 2006 operating profit.
    Norm Johnson, CLARCOR’s Chairman and Chief Executive Officer, said, “We are off to a strong start in 2006 with sales growing by 9% and operating profit by 23%. Excluding acquisition growth, internal sales growth was 7% in the first quarter, and internal operating profit growth was over 19%. Operating margins improved to 12.1% in 2006 from 10.7% in 2005. All three of our operating segments increased sales, operating profit and operating margins. International sales increased by 16% in the first quarter to 24% of total sales. We expect international sales to be a lower percentage of total sales for the rest of 2006 as seasonal domestic demand increases during the rest of the year.

 

 

    “Engine/Mobile segment sales increased by 10%, with growth across all major market segments, both domestically and internationally. Market demand for heavy-duty filter products from traditional aftermarket and OEM dealer customers remains solid as does product demand from railroad filter and dust collector cartridge customers. We expect this to continue through 2006.
 
    “Industrial/Environmental segment sales, including sales from acquisitions completed in 2005, grew by 6%. Excluding acquisitions, sales grew by over 2%. Sales growth was spread across most major markets, including HVAC, aerospace and capital goods sectors. Sales to oil and gas markets continue to be slow, but quoting activity is increasing, and we expect new orders from both current and new customers during 2006. Although we may not see a significant recovery in shipments for the rest of this year, we remain very confident about the future of the oil and gas filter business. Sales to automotive customers remain difficult, and pressure on operating margins continues. We do not see this changing as there appears to be no foreseeable improvement in the economics of the domestic automotive business likely in 2006. Although the business remains profitable, it does not provide the margins we see in our other markets.
 
    “Our Packaging segment had an exceptionally strong first quarter with sales growing by 22% and operating profit increasing four-fold. The first quarter is normally this segment’s smallest and is not always indicative of performance during the next three quarters. However, based on our current order book, new products which we have developed in partnership with our customers and significant improvements made over the last several years in manufacturing productivity, we expect increased sales and profits in this segment for 2006 compared to 2005.
 
    “Other expense declined this quarter as interest rates rose and we were able to earn additional interest income on increased cash balances. 2006 is expected to be another strong cash flow year for CLARCOR. During the quarter, we did not repurchase any of our common stock under our current $150 million repurchase authorization. Repurchases in future quarters will depend on cash availability, acquisition opportunities and the market price of our common stock.
 
    “Capital expenditures this year will be approximately $25 million to $30 million compared to $24 million in 2005. Our tax rate in the first quarter was higher than we expected at 36.9% due to changes in the amount of deductible expenses. For the rest of 2006, we expect our effective tax rate to be in the range of 35.5% to 36.0%.
 
    “We expect that 2006 earnings per share will be in the $1.52 to $1.60 range, which includes the impact of expensing stock options. The impact of stock option expensing for 2006 will be approximately $0.03 per share. We remain optimistic about 2006 based on our first quarter results and expect 2006 to be our 14th consecutive year of record sales and profits for CLARCOR.”

 

 

    CLARCOR will be holding a conference call to discuss the first quarter results at 10:00 a.m. CST on March 23, 2006. Interested parties can listen to the conference call at or www.viavid.com. A replay will be available on these websites and also at 888-203-1112 or 719-457-0820 and providing confirmation code 7574482. The replay will be available through March 30, 2006 by telephone and for 30 days on the Internet.
    CLARCOR is based in Franklin, Tennessee, and is a diversified marketer and manufacturer of mobile, industrial and environmental filtration products and consumer and industrial packaging products sold in domestic and international markets. Common shares of the Company are traded on the New York Stock Exchange under the symbol CLC.
 
    Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements made in this press release other than statements of historical fact, are forward-looking statements. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include, among other things: statements and assumptions relating to future growth, earnings, earnings per share and other financial performance measures, as well as management’s short-term and long-term performance goals; statements relating to the anticipated affects on results of operations or financial condition from recent and expected developments or event; statements relating to the Company’s business and growth strategies; and any other statements or assumptions that are not historical facts. The Company believes that its expectations are based on reasonable assumptions. However, these forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the Company’s actual results, performance or achievements, or industry results, to differ materially from the Company’s expectations of future results, performance or achievements expressed or implied by these forward-looking statements. In addition, the Company’s past results of operations do not necessarily indicate its future results. These and other uncertainties are discussed in the “Risk Factors’’ section of the Company’s 2005 Form 10-K. The future results of the Company may fluctuate as a result of these and other risk factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date of this press release. Except as otherwise required by applicable laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements or the risk factors described in this press release, whether as a result of new information, future events, changed circumstances or any other reason after the date of this press release.
TABLES FOLLOW
- more -

 

 

CLARCOR 2006 UNAUDITED FIRST QUARTER RESULTS cont’d.
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands except per share data)
                 
    Three Months  
For periods ended March 4, 2006 and February 26, 2005   2006     2005  
 
Net sales
     213,183       196,261  
Cost of sales
     149,409       139,242  
 
            
Gross profit
     63,774       57,019  
Selling and administrative expenses
     37,901       35,939  
 
            
Operating profit
     25,873       21,080  
Other income (expense)
     (41 )     (312 )
 
            
Earnings before income taxes and minority interests
     25,832       20,768  
Income taxes
     9,520       7,536  
 
            
Earnings before minority interests
     16,312       13,232  
Minority interests in earnings of subsidiaries
     (111 )     (78 )
 
            
 
                
Net earnings
   $ 16,201     $ 13,154  
 
            
 
                
Net earnings per common share:
                
Basic
   $ 0.31     $ .0.26  
 
            
Diluted
   $ 0.31     $ .0.25  
 
            
 
                
Average shares outstanding:
                
Basic
     51,792,245       51,444,416  
Diluted
     52,498,939       52,321,798  
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
                 
    March 4,     December 3,  
    2006     2005  
 
Assets
                
Current assets:
                
Cash and cash equivalents
   $ 21,420     $ 18,502  
Short-term investments
     16,835       10,400  
Accounts receivable, net
     149,812       152,755  
Inventories
     125,312       117,508  
Other
     25,373       25,768  
 
            
Total current assets
     338,752       324,933  
Plant assets, net
     146,981       149,505  
Acquired intangibles, net
     167,929       168,176  
Pension assets
     22,235       22,069  
Other assets
     11,154       10,589  
 
            
 
   $ 687,051     $ 675,272  
 
            
 
                
Liabilities
                
Current liabilities:
                
Current portion of long-term debt
   $ 237     $ 233  
Accounts payable and accrued liabilities
     99,658       108,693  
Income taxes
     14,674       12,544  
 
            
Total current liabilities
     114,569       121,470  
Long-term debt
     15,999       16,009  
Long-term pension liabilities
     17,433       16,287  
Other liabilities
     38,910       38,673  
 
            
 
     186,911       192,439  
Shareholders’ Equity
     500,140       482,833  
 
            
 
   $ 687,051     $ 675,272  
 
            
SUMMARY CASH FLOWS
(Dollars in thousands)
                 
    Three Months  
    2006     2005  
 
From Operating Activities
                
Net earnings
   $ 16,201     $ 13,154  
Depreciation
     5,483       5,214  
Amortization
     538       315  
Stock compensation expense
     632       229  
Excess tax benefits from stock compensation
     (903 )     —  
Changes in assets and liabilities
     (16,347 )     (2,566 )
Other, net
     116       75  
 
            
Total provided (used) by operating activities
     5,720       16,421  
 
            
 
                
From Investing Activities
                
Plant asset additions
     (2,906 )     (3,575 )
Business acquisitions
     (206 )     —  
Other, net
     8       39  
 
            
Total provided (used) by investing activities
     (3,104 )     (3,536 )
 
            
 
                
From Financing Activities
                
Net payments under line of credit
     —       (7,500 )
Payments on long-term debt
     (18 )     (702 )
Cash dividends paid
     (3,499 )     (3,281 )
Excess tax benefits from stock compensation
     903       —  
Other, net
     2,649       (2,787 )
 
            
Total provided (used) by financing activities
     35       (14,270 )
 
            
 
                
Effect of exchange rate changes on cash
     267       146  
 
            
 
                
Change in Cash and Cash Equivalents
   $ 2,918     $ (1,239 )
 
            

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CLARCOR 2006 UNAUDITED FIRST QUARTER RESULTS cont’d.
QUARTERLY INCOME STATEMENT DATA BY SEGMENT
(Dollars in thousands)
                 
    Quarter Ended  
    March 4,     February 26,  
    2006     2005  
 
            
Net sales by segment:
                
Engine/Mobile Filtration
   $ 91,032     $ 83,129  
Industrial/Environmental Filtration
     102,656       97,198  
Packaging
     19,495       15,934  
 
            
 
   $ 213,183     $ 196,261  
 
            
 
                
OPERATING PROFIT BY SEGMENT:
                
Engine/Mobile Filtration
   $ 19,073     $ 16,778  
Industrial/Environmental Filtration
     5,485       3,969  
Packaging
     1,315       333  
 
            
 
   $ 25,873     $ 21,080  
 
            
 
                
OPERATING MARGIN BY SEGMENT:
                
Engine/Mobile Filtration
     21.0 %     20.2 %
Industrial/Environmental Filtration
     5.3 %     4.1 %
Packaging
     6.7 %     2.1 %
 
            
 
     12.1 %     10.7 %
 
            

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